Massive employers Deloitte and Zoom recently came into the spotlight for their decisions to cut worker benefits.
At Deloitte, a group of workers will see parental leave, PTO, pensions and IVF funding scaled back starting in January, Business Insider reported. Meanwhile, Zoom reduced the number of weeks offered as paid parental leave.
As more power shifts to employers, hiring remains tight and healthcare costs continue to soar, where exactly does the employee value proposition stand?
Erin McAuley, chief people officer at Springline Advisory, an accounting and advisory services firm, said the changes aren’t surprising.
“Firms are definitely under real pressure right now between cost structure and our workforce models, client expectations,” she said.
But she urged caution.
“Benefits aren’t perks, really; they’re signals to people,” McAuley said. “When you think about them as signals — and signals [of] how people translate their value — you have to be very cautious about the different decisions that you’re making.”
The main thing, she said, is to consider how any benefits changes will land with employees.
“You’re going to see that show up in your profitability and the economics of your business,” McAuley said. “People risk it hitting their pocketbook in lots of different ways, both in the cost of retention and great talent leaving but also the cost of client experience and what that means for client retention.”
The business decisions companies make as they decide where to spend and where to pull back are tied directly to employee trust, Jared Pope, a benefits and employment law attorney and CEO of Work Shield, a workplace misconduct management firm, said in emailed comments.
“What is new is that benefits people thought were locked in are now being adjusted, and in some cases, applied differently across parts of the workforce. And that’s where things get tricky,” Pope said. “Employees don’t see these as perks. They see them as part of what they were promised as total compensation when they took the job. When that changes, it doesn’t just hit compensation. It creates uncertainty.”
That uncertainty shows up in lower levels of focus, shifts in engagement and potential turnover, he said.
“Some benefits carry more weight than others. Parental leave and fertility support are not interchangeable with gym stipends or office perks. They directly affect how employees plan their lives and careers,” Pope said.
For that reason, changes aren’t evenly distributed, he said. Rather, women and caregivers — groups that companies have targeted to improve retention and representation for years — tend to be harder hit.
“At the end of the day, once you start pulling back on something employees rely on, you don’t just change the benefit. You change how people evaluate working for you,” Pope said.
In an emailed statement, a Zoom spokesperson said the company is committed to employee well-being and supporting new parents.
“We regularly review our benefits to ensure they remain aligned with the marketplace and the long-term health and sustainability of our business. We are confident our overall compensation and benefits package – including our updated parental leave policy – remains competitive and in line with peers,” the spokesperson said.
Deloitte did not respond to a request for comment.
McAuley recommended making sure that a company’s people strategy is representative of its business strategy.
“That's what’s going to guide you through these ebbs and cycles,” she said. “People remember how they were treated … That shows up in both the cost of retention, the cost of hiring and then your employee brand.”
Dr. Roger Shedlin, CEO of WIN, a family-building and reproductive health benefit provider, said his company’s experience convinces them that the companies making benefits cuts are “outliers.”
“It is rare, in our experience working with clients, to see clients cut back on these benefits. Actually, we’ve seen the exact opposite,” he said.
